“Capacity to suffer” i.e., how the “owner mindset” helps companies in going through the pain of building brand value at high losses to reap the rewards later on.
Creating value instead of spotting value (Ben Graham). Four filters for investments: (1) profitable business with good returns on capital without using too much leverage, (2) able and honest management, (3) compounding feature or the re-investment dynamic, (4) valuation : don’t be cheap when you find an awesome business. Likes to think the business as a movie which is un-folding. Will the business get better or worse with time ?
Distinguish between risk and uncertainty. Stay away from risk but collect things which are uncertain but have a high chance of working out i.e., “heads I win big, tails I don’t lose much”.
Not to follow
Charles Brandes [youtube]: Manages money for institutional investors. Committees make investment decisions.
William H. Browne [youtube]